Law Commons^™

Duty And Diversity, Chris Brummer, Leo E. Strine Jr.

All Faculty Scholarship

In the wake of the brutal deaths of George Floyd and Breonna Taylor, a slew of reforms from Wall Street to the West Coast have been introduced, all aimed at increasing Diversity, Equity, and Inclusion (“DEI”) in corporations. Yet the reforms face difficulties ranging from possible constitutional challenges to critical limitations in their scale, scope and degree of legal obligation and practical effects. In this Article, we provide an old answer to the new questions facing DEI policy, and offer the first close examination of how corporate law duties impel and facilitate corporate attention to diversity. Specifically, we show that …

Justice Department's New Position On Patents, Standard Setting, And Injunctions, Herbert J. Hovenkamp

All Faculty Scholarship

A deep split in American innovation policy has arisen between new economy and old economy innovation. In a recent policy statement, the Antitrust Division of the Justice Department takes a position that tilts more toward the old economy. Its December, 2019, policy statement on remedies for Standard Essential Patents issued jointly with the U.S. Patent and Trademark Office and the National Institute of Standards and Technology reflects this movement.

The policy statement as a whole contains two noteworthy problems: one is a glaring omission, and the other is a mischaracterization of the scope of antitrust liability. Both positions are strongly …

Was The Amt Effectively Repealed?, Reed Shuldiner

All Faculty Scholarship

The individual alternative minimum tax (AMT) was a much disliked feature of the tax law prior to the Tax Cuts and Jobs Act (TCJA). Yet, despite repeated promises to repeal the AMT as part of tax reform, the TCJA dropped AMT repeal in favor of increasing the AMT exemption and its phaseout threshold. The question raised by this development is whether the AMT changes should be viewed as yet another stop-gap tweak of the AMT or whether the changes should be viewed as returning the AMT to its roots as a tax on high-income taxpayers using excessive loopholes. In this …

The Modigliani-Miller Theorem At 60: The Long-Overlooked Legal Applications Of Finance’S Foundational Theorem, Michael S. Knoll

All Faculty Scholarship

2018 marks the 60th anniversary of the publication of Franco Modigliani and Merton Miller’s The Cost of Capital, Corporation Finance, and the Theory of Investment. Widely hailed as the foundation of modern finance, their article, which purports to demonstrate that a firm’s value is independent of its capital structure, is little known by lawyers, including legal academics. That is unfortunate because the Modigliani-Miller capital structure irrelevancy proposition (when inverted) provides a framework that can be extremely useful to legal academics, practicing attorneys and judges.

Clean Electrification, Shelley Welton

All Faculty Scholarship

To combat climate change, many leading states have adopted the aim of creating a “participatory” grid. In this new model, electricity is priced based on time of consumption and carbon content, and consumers are encouraged to adjust their behavior and adopt new technologies to maintain affordable electricity. Although a more participatory grid is an important component of lowering greenhouse gas emissions, it also raises a new problem of clean energy justice: utilities and consumer advocates claim that such policies unjustly benefit the rich at the expense of the poor, given the type of consumer best able to participate in the …

The Social Value Of Mortality Risk Reduction: Vsl Vs. The Social Welfare Function Approach, Matthew D. Adler, James K. Hammitt, Nicholas Treich

All Faculty Scholarship

We examine how different welfarist frameworks evaluate the social value of mortality risk-reduction. These frameworks include classical, distributively unweighted cost-benefit analysis—i.e., the “value per statistical life” (VSL) approach—and three benchmark social welfare functions (SWF): a utilitarian SWF, an ex ante prioritarian SWF, and an ex post prioritarian SWF. We examine the conditions on individual utility and on the SWF under which these frameworks display the following five properties: i) wealth sensitivity, ii) sensitivity to baseline risk, iii) equal value of risk reduction, iv) preference for risk equity, and v) catastrophe aversion. We show that the particular manner in which VSL …

Risk Equity: A New Proposal, Matthew D. Adler

All Faculty Scholarship

What does distributive justice require of risk regulators? Various executive orders enjoin health and safety regulators to take account of “distributive impacts,” “equity,” or “environmental justice,” and many scholars endorse these requirements. But concrete methodologies for evaluating the equity effects of risk regulation policies remain undeveloped. The contrast with cost-benefit analysis--now a very well developed set of techniques --is stark. Equity analysis by governmental agencies that regulate health and safety risks, at least in the United States, lacks rigor and structure. This Article proposes a rigorous framework for risk-equity analysis, which I term “probabilistic population profile analysis” (PPPA). PPPA is …

Equity Analysis And Natural Hazards Policy, Matthew D. Adler

All Faculty Scholarship

What is an “equitable” policy for mitigating the impacts of hurricanes, earthquakes, floods, and other natural hazards? Economists tend to see “equity” or “distribution” as irreducibly political and subjective. But, in truth, equity analysis and cost-benefit analysis are on a par. Both require a normative justification. Moreover, normative argument can help us structure equity analysis, just as it can cost-benefit analysis. This chapter, written for a forthcoming book on natural hazards policy after Katrina, argues that equity is a normative consideration distinct from efficiency or overall well-being. It then argues that equity is individualistic, not group-based; ex post, not ex …